Buy Asian Paints; target of Rs 990: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss's research report on Asian PaintsAsian Paints (APL) has ventured into the branded adhesives space with launch of 3 offerings—Loctite Quick, Loctite Rapid and Loctite Tough. The adhesives space is currently dominated by Pidilite (PIDI) with 70% plus market share and it has been successful in warding off competition from global behemoths as well as local players due to superior distribution and brand. Both of these may not be an issue for APL as the company can easily tap into its existing paint dealers (~36,000). However, APL will have to strengthen its network in kirana shops (sizeable sale points) which will be a key challenge for it. We perceive APL’s entry in the adhesives space as a strong threat to PIDI. APL is among our top picks and we retain our faith in the stock. Maintain ‘BUY’. APL remains key beneficiary of recovery in urban demand and GDP revival. Recent ~2% weighted average price cut across APL’s paint portfolio will help in maintaining double digit volume growth led by higher growth in the lower segment. The stock is trading at 37.8x FY17E and 31.8x FY18E EPS. We maintain ‘BUY/SO’ with target price of INR990. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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